Written by Brenda Nakalema

Rivian’s Production of Electric Trucks Increases. Stock Rises Too.

Rivian Automotive greatly increased production in the fourth quarter, leaving investors feeling relieved. Rivian (ticker: RIVN) reported first-quarter production during …

Rivian Automotive greatly increased production in the fourth quarter, leaving investors feeling relieved. Rivian (ticker: RIVN) reported first-quarter production during trading on Tuesday of roughly 2,553 electric trucks, an increase from 1,015 vehicles produced in the fourth quarter of 2021.

The results fell right in line with expectations from Wall Street, and the stock was seen rising in premarket trading on Wednesday, the stock climbed by 3%. S&P 500 and the Dow Jones Industrial Average futures were off about 0.7% and 0.5%, respectively.

The move on Wednesday recouped some of the 9.3% loss in Rivian shares that happened on Tuesday. Tuesday proved to be a particularly tough day for growth stocks. The Nasdaq Composite Index dropped nearly 2.3% following comments made by the Federal Reserve Gov. Lael Brainard in a speech.

On top of the already tough time Rivian stock was experiencing, the drop only seemed to make matters worse. Wednesday trading had shares drop almost 60% year to date and are currently down over 75% from their 52- week high of almost $180 a share.

One of the core reasons behind the decline in stock prices across the board is the Fed’s ongoing battle with inflation, which has had a greater effect on growth stocks than others. However, Rivian has also had its own troubles to face.

At the beginning of the year, Wall Street set Rivian expectations at 40,000 vehicles in 2022. Rivian then issued guidance of about 25,000 vehicles in its fourth-quarter earnings release in March.

On Tuesday, Rivian then released its latest guidance, indicating an increase in production meant to meet the issued report. The company doesn’t seem to be worried, as it indicated that it’s on track to meet its full-year 2022 guidance expectations.

Investors will be on the lookout for a positive surprise with regards to production rates. This could potentially get the stock climbing again.

Despite the lacklustre performance, Wall Street remains a support of the stock, with almost 70% of analysts rating the company shares as a Buy option. The average Buy-rating ratio for stocks in the S&P 500 is roughly 58%. (The Buy-rating ratio for EV competitor Tesla stock is less than 50 %.)

Rivian stock stands at an average analyst price target of about $79, an 80% increase from recent levels.